By Sylvan N. Wilson
September 20, 2009
Trinidad and Tobago News Blog
www.trinidadandtobagonews.com/blog
The Government and in particular the Minister of Finance have been attempting to justify their murderous property tax by arguing that the value of properties has changed since 1948. They have astutely deciphered that properties have increased in value over the last sixty-one years.
No-one can deny that, of course, but is that all that has changed between then and now? My analysis suggests to me that so many fundamental changes have taken place in T&T since 1948 that the very concept of property taxes on residential properties needs to be revisited.
My understanding of how this government works is that most, if not all, taxes that are collected end up in the Consolidated Fund and expenditure to finance their various activities is deducted from the Fund. If that is so, then the landscape of taxation of today bears absolutely no resemblance to that of 1948.
VAT has been applied in this country for almost twenty years now. This means that every house that was built in that period and most of the services we use since then have been subjected to taxes. Which homeowner paid VAT in 1948?
Further, PAYE was introduced by the first Eric Williams regime and exceeded thirty percent at one time. Which homeowner paid income taxes back in 1948? Additionally, today we pay NIS, Health Surcharge, Road Improvement, and a bundle of other taxes that were not applicable back in 1948.
Indeed, the propertied class of 2009 is completely different to that of 1948. Back then they were in the main a tiny elite group whose bourgeois status was closely aligned to the fact that they owned property. So that the ownership of the property and its value, significantly determined their capacity to pay taxes and was also indicative of the State services they enjoyed. Proximity to the city/town, schools, hospitals, and the availability of water, electricity, sanitation etc were critical to determining the value of the property and the taxes to be paid. To my mind PAYE has replaced that as the indicator of one’s earning power and extracts more and more as earnings increase. Today, thousands of ordinary working class people own their own homes.
The value of properties today is determined by many other factors including security, proximity to industrial estates, traffic congestion, etc. Let us take Tobago for instance, hundreds of foreigners have determined that they want to make the beautiful island their home and they are prepared to pay millions of TT$ for it. Does it mean that the ordinary Tobagonian must be penalized by exorbitant taxes as a result?
What does it matter to the homeowner whether someone is prepared to pay $1.00 or $1million per month to rent a house in their community? Should law abiding citizens pay more taxes because drug money is being laundered? A home really provides the constitutionally guaranteed social benefit of shelter; any increase in value of the property is an unrealized gain that is of no benefit to the homeowner except when sold and then the tax net will deal with that.
The real issue here has less to do with “modernizing” property taxes and more to do with the fact that the “money done”. Our mono-crop economy can no longer provide the Government with income streams to take care of their insatiable thirst to spend on show pieces for the pleasure of the Emperor. It is ludicrous for the Government to claim that they NOW want to diversify the economy when the “money done”.
Where are the hundreds of foreign business people who were sitting on piles of money just waiting to see if T&T could successfully host the Summit of the Americas? Can the Minister of Energy cite our hosting of that conference and the Commonwealth Heads as the incentive for the oil and gas companies to invest in T&T and not have to provide cash incentives from our already depleted income?
The most fundamental period that we need to focus on as a country is from the mid-seventies and before to now. Back then Citizens of the country understood and utilized the power of PROTEST. We marched in our tens of thousands on the basis of our support or rejection of issues. Partisan considerations took second place.
How can we as a people not protest about Government’s impotence to deal with crime? How can we allow the sordid revelations that have surfaced about UdeCott to be lost in the convoluted maze of procedures? How can T&TEC and Petrotrin be allowed to spend more than double the original estimates on projects they undertook? How can we stay quiet and have the Emperor spend BILLIONS on hosting ego inflating conferences and then squeeze out the last pennies from retirees’ pensions and call it property taxes? It is only when we take to the streets in our tens of thousands will there be any serious consideration for proper and accountable government in this country.
My understanding of how this government works is that most, if not all, taxes that are collected end up in the Consolidated Fund and expenditure to finance their various activities is deducted from the Fund. If that is so, then the landscape of taxation of today bears absolutely no resemblance to that of 1948.
VAT has been applied in this country for almost twenty years now. This means that every house that was built in that period and most of the services we use since then have been subjected to taxes. Which homeowner paid VAT in 1948?
Further, PAYE was introduced by the first Eric Williams regime and exceeded thirty percent at one time. Which homeowner paid income taxes back in 1948? Additionally, today we pay NIS, Health Surcharge, Road Improvement, and a bundle of other taxes that were not applicable back in 1948.
Indeed, the propertied class of 2009 is completely different to that of 1948. Back then they were in the main a tiny elite group whose bourgeois status was closely aligned to the fact that they owned property. So that the ownership of the property and its value, significantly determined their capacity to pay taxes and was also indicative of the State services they enjoyed. Proximity to the city/town, schools, hospitals, and the availability of water, electricity, sanitation etc were critical to determining the value of the property and the taxes to be paid. To my mind PAYE has replaced that as the indicator of one’s earning power and extracts more and more as earnings increase. Today, thousands of ordinary working class people own their own homes.
The value of properties today is determined by many other factors including security, proximity to industrial estates, traffic congestion, etc. Let us take Tobago for instance, hundreds of foreigners have determined that they want to make the beautiful island their home and they are prepared to pay millions of TT$ for it. Does it mean that the ordinary Tobagonian must be penalized by exorbitant taxes as a result?
What does it matter to the homeowner whether someone is prepared to pay $1.00 or $1million per month to rent a house in their community? Should law abiding citizens pay more taxes because drug money is being laundered? A home really provides the constitutionally guaranteed social benefit of shelter; any increase in value of the property is an unrealized gain that is of no benefit to the homeowner except when sold and then the tax net will deal with that.
The real issue here has less to do with “modernizing” property taxes and more to do with the fact that the “money done”. Our mono-crop economy can no longer provide the Government with income streams to take care of their insatiable thirst to spend on show pieces for the pleasure of the Emperor. It is ludicrous for the Government to claim that they NOW want to diversify the economy when the “money done”.
Where are the hundreds of foreign business people who were sitting on piles of money just waiting to see if T&T could successfully host the Summit of the Americas? Can the Minister of Energy cite our hosting of that conference and the Commonwealth Heads as the incentive for the oil and gas companies to invest in T&T and not have to provide cash incentives from our already depleted income?
The most fundamental period that we need to focus on as a country is from the mid-seventies and before to now. Back then Citizens of the country understood and utilized the power of PROTEST. We marched in our tens of thousands on the basis of our support or rejection of issues. Partisan considerations took second place.
How can we as a people not protest about Government’s impotence to deal with crime? How can we allow the sordid revelations that have surfaced about UdeCott to be lost in the convoluted maze of procedures? How can T&TEC and Petrotrin be allowed to spend more than double the original estimates on projects they undertook? How can we stay quiet and have the Emperor spend BILLIONS on hosting ego inflating conferences and then squeeze out the last pennies from retirees’ pensions and call it property taxes? It is only when we take to the streets in our tens of thousands will there be any serious consideration for proper and accountable government in this country.
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Responsibility is not a one-sided affair. Government is ultimately responsible to the people and must be able to present a fair and equitable reporting of how the people’s money is being spent. What we have noticed in recent years is a squander of the treasury and dwhen the meter shows a lowered reading the public is called upon to refill with dreamed up taxes. The Uff commission of enquiry have so far allowed us an opening of how callous the government has been with hundreds of miullions of dollars going into the hands of foreigners without an argument from the governmemnt. We look at the so-called Brian Lara stadium lying in our midst as our ‘white elephant’ with no accountability for its demise. Surely this is w-a-s-t-e in the extreme and why has Government prosecuted anyone for wrong doing? This should be done in the interest of the public and as a matter of process but there is no public outcry and government institution feel the need to question casual nature of ;spending the people’s money without accounting to them. I think that the case is made here for the 1948/2009 comparison and therefore to say that our taxes should be risen by three to six hundred percent is irresponsible and too strong a medicine to take because our government spends like a drunken sailor and when they awake to ‘the morning after’ they focus their eyes on properties and their lack of assessment since 1948. We do not need this tax at this time even though assessment should not be ruled out on how we tax properties as a general rule. My point is that we should not be taxed just to fill in the gaps to prop up government spending. It should not just be about taxing it should be about zoning, buying and selling of properties, vaulations, residential and commercial viabilities and other socially revealing fixations.